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I rarely use the word proud or pride because that signals a profound happiness with the status quo. And I don't have that because I'm always at odds with the status quo. That's sort of the natural malcontent posture that we have. Yeah, we're here, but we could be there. So what gives? How do we get there, right? So we're always envisioning a future that is different than the one that we're currently experiencing. ♪
Welcome to The Knowledge Project, a podcast about mastering the best of what other people have already figured out so you can apply their insights to your life. I'm your host, Shane Parrish.
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Today, my guest is Frank Slootman, one of the most incredible operators that Silicon Valley has ever seen. Frank is the chairman and CEO of Snowflake. Before that, he was the CEO of ServiceNow, taking the organization from $100 million in revenue to $1.4 billion. Prior to that, he was the CEO of Data Domain, leading to an acquisition by EMC for over $2 billion. I've been trying to get Frank on the show for nearly a year, but luckily, I don't give up very easily.
Thank you.
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I think when I was thinking about where to start, I want to start with going into a new company and the playbook that you use for the first 90 days. Can you walk me through what's done before, what's done on day one, and give me some detail over how you look at the next 90 days? Because that's really the time when you can transform a company. Yeah, I tend to take a little bit of exception to the term playbook, like it's a cookie cutter thing. And it's not. It's also not a football game.
or there's very precise rules on how to play the game. It's very situational, very much first principles. I mean, you come into a new situation and you just start processing on what you're seeing. But that said, yes, there are things that you zero in on each and every time. And that is, you know,
Are there right people on the bus? Are there people that need to get off the bus? You know, we're inspecting the functions. Are they working? Are they not working? Do people think they work? You know, what can we see very, very quickly? And then you start prioritizing, okay, you know, some things, you know, are obvious. They need to be dealt with ASAP. Then everything starts to sort itself. So, you know, there's usually a number of things that happen incredibly fast, like week one,
And then there are things that happen slower, you know, and maybe, you know, 30, 60, 90 days. But in 90 days, you know, I tend to be through sort of the initial, you know, triage of, okay, you know what, let's get ourselves on a solid footing here where we can function and operate and understand. And then we can, you know, much more incrementally, iteratively, you know, progress from there.
So that's sort of the, you know, if you're asking for a framework, that would be it. But I will tell you that every place I've been, they're all different. You got to be very careful that you don't get into a rinse and repeat mode where, you know, you just think you have a formula or an algorithm and you can just apply it over and over again. That's just really simplistic thinking. It will lead you astray because you kind of try to observe things differently.
in a way, you know, like a five-year-old would. They've never seen it before. And how are you reacting to it, you know? So I understand there's no repeatable framework that you can just apply, but I would imagine there's sort of repeatable principles and methods of thinking that you use. What are the ones that you find the most helpful? Well, I look very hard at what's working, what's not working. And in other words, you know, some things are not working at all.
some things seem to be working reasonably well and then there's sort of the stuff that you're sort of humming and hawing on. So obviously you prioritize the, I mean, I've sort of separated with people very, very quickly because I think the functions that they were responsible for were barely breathing. And at that point, you know, I don't hesitate, you know, I move on quickly, immediately. You know, I go after cultural issues, you know, people that are just, you know, egregious violators of just, you know,
Things that we all generally find normal and acceptable. We very quickly separate on behavior. Performance is something that we will give more time. Behavior, we won't. And that's because behavior is a choice, not a skill set.
you know when you come in as a new leader everybody's watching not just what you're doing what you're not doing so if you're not moving on things that people that everybody is seeing your leadership brand is already in question because you know apparently you're blind and apparently you're hesitating uh or you're tolerant of behavior that you shouldn't be tolerant of so yeah there's pressure because you know it's not just what you want to do it's the whole world's watching
You said behavior is a choice, not a skill set. I've never heard it quite framed that way. I think that's a very, that's a really interesting way to look at it. But you also said that you sort of, you'll give time for performance, but not for behavior. How much time? How do you learn? Like, when do you pull the plug? When do you reinvest? And how do you think about that?
Well, look, you know, behavior is, it'll smack you in the face usually. But I've also seen things happen underground where, you know, I wasn't aware of it and I wasn't seeing it, but it was happening because of what happened on calls that I wasn't on. You know, one time I got tipped off by an employee of my former company that said, look, you know, that office over there is a complete mess.
you know, disaster and because they knew people there and you know how sad people are, right? Everybody talks, doesn't matter what company you're in. And then, you know, we started, you know, basically peeling away the layers and all of a sudden, you know, you come across, you know, really bad situations, abusive situations.
harassment, all these kinds of things because sometimes it's just not visible. It's happening. People don't like to talk about it. They're worried that they're ratting on people and they don't want to go to their manager because they don't trust their manager. They don't trust HR, which is usually your second choice or maybe your first choice to go when you have real behavioral cultural problems.
And then it just keeps going on. So I've been surprised before about how much, you know, wasn't visible to us, not just to me, but also the people that were, that I had brought in, they were close to me, they were not seeing it either. Eventually, you know, believe me, we will find it and we will get to it. And then we will move at lightning speed.
Because you want to get bad behavior out of an organization fast. That is your leadership brand. You start tolerating that, there's no end in sight to what you're going to have. Trust is key to moving quickly, I would imagine, with velocity in organizations. How do you go about establishing trust in a performance-based culture? Well, people need to believe that you're fair, that it's not just personal preference, right? That you're not doing things because, oh, I don't like your haircut or whatever. Right.
It has nothing to do with that. It has to do with, you know, how do we come together? How do we behave as a group? And, you know, if you have, you know, people behaving in huge conflict with that, then it's like, yeah, we are going to move on it. Sometimes, you know, I've had situations, especially with young people where, you
Hey, we need to do a reboot, reset, come back tomorrow. I'm sure your parents didn't teach you, you know, to behave this way and you can do better. And I've seen people come back literally over the weekend and be a different person because for whatever reason, they were led astray by managers that just, you know, were inspiring that kind of behavior. That happens, right? People learn behaviors from what they see around them with the behavior that gets encouraged.
and they don't realize that they are just getting adrift from their own upbringing and their own personal principles because that's sort of the environment starts to really... It's a slippery slope that they get on and all of a sudden they're in a place where they don't even recognize themselves anymore. And that's where a reset can really work because basically you're regrounding them to normal behaviors and then things can work out really nicely
from there on. But most of the time, unfortunately, it's like, look, you know, you're not a fit here. You know, this is not who we are, who we want to be. You know, it's choosing. You know, it's just, look, we want you to be this way, not that way. And, you know, for some people, it's like, hey, they learn behaviors in other companies. It's part of who they are. It's their culture. This is not for you, man.
alan malali put it to me this way he said uh when you're you're choosing a behavior that's not the organizational behavior that's desired you're choosing not to be a part of the organization i thought that was a powerful way to think about it yeah you're uh you're you're separating and you're in you're in violation of the the driving culture is really important because if you don't you know other people will will fill that void right and you get subcultures in a city or a division
Because strong personalities can do that. So unless you are filling that void, right, it will get filled by something or somebody else. And before you know it, you know, you're just a grab bag of stuff.
and it's just a bunch of fiefdoms running a company. Well, you don't want that. The company needs to stand for something. This is who we are. - Seems like there's a lot of organizations that are more family-based. I mean, they take a very similar approach to a family and they don't necessarily think in terms of performance. What are your thoughts on that? - Well, you know, we've talked about this quite a bit in recent years. You know, I don't think of business as a family. Unfortunately, in a family, you can't fire your family, even though you sometimes want to.
You have to tolerate them and deal with them. And sometimes in the most egregious way, that is just the nature of families. I mean, all the dysfunction that comes with it. But in business, it's more like being a professional sports franchise, right? You're assembling the best players. And, you know, we may be friends, but we don't have to be friends because we're not coming together on the basis of friendship. We're coming together on the basis of mission. You know, in other words, shared purpose, right?
You know, we're very demanding of each other. And it's really about, you know, our respective contributions to the mission. That's the basis of our relationship. So it is much more akin to professional sports. I think that's the correct analogy. Now, some companies don't want to be that way. Companies like Salesforce and even Google come to mind. But, you know, in the end, they're laying people off too by the thousands. Okay. So I guess it's not family after all.
Do you think most organizations try to do too much? There seems to be a natural entropy that sort of builds up, right? You start with one thing, it becomes successful, and then you sort of expand your footprint. And before you know it, you have, you know, before Steve Jobs came back to Apple, they have
I don't know, what was it like 20 or 30 different products? The first thing he did was narrow the focus down to four key products. How do you think about that? Yeah, well, the interesting thing about about Steve was that he had a he had a standard called Insanely Great, which, you know, I remember at the time that it was kind of a thing in Silicon Valley. So if it didn't meet that standard, you know, it would get scratched really, really quickly if it wasn't, you know, incredibly exciting and world changing and all that.
we just couldn't be bothered to you know even have that on the palette and and work on that so i think that's a great way to be by the way to just demand to be inspired and be in awe you know um of the nature of the mission and what we're trying to do
Because that gives energy, that gives life, that creates excitement, that creates focus, creates urgency, and people come to work with a sense of mission rather than, well, I have to be here for my paycheck.
So it's really applying that filter rather than I got too many things going on. There just aren't too many insanely great things. It will naturally sort itself to a small set. When you come in, you also believe in sort of doing less but doing better and narrowing the focus. How does that manifest itself in an organization? How do you go through and decide where to focus and what to cut on?
We constantly have conversations, you know, around prioritization, you know, what is, we can't do everything. So we have to choose. Not choosing is the worst thing you can do because now you're compromising everything. So the question is, you know, we use, I use all kinds of different ways of trying to figure out what is most critical. And then, by the way, and we revisit that conversation constantly. It has to be sort of, you know, reaffirming, but it's like, hey,
if you can only do one thing which one would you pick and and and and why and what would be the consequences of not doing you know the other things so we start sort of strapping it strapping it on for size and like can i live with that or what would happen if if if that was the scenario here the problem is you know we over time people create you know they're a mile wide and inch deep right we we create more more more more and then pretty soon we're swimming in glue
you know we're lethargic you know we're moving like like molasses and uh that saps the energy you know out of the people and and the organization so what i go through is okay let's just let's just take things out let's just uh you know do things in sequence rather than parallel um because you know we just want to be lightning fast on the things that really matter and really you know make sure that we're appropriately provisioned right because oftentimes
Everybody gets one hundredth of the resources as opposed to getting 50% of the resources. Things all of a sudden go a lot faster when you have the focus and the resources and the provisioning. Things really move, right? Whereas if you have to share with 50 other things, nothing moves now. Being very aware of it. Now, you can create focus in different groups, right? When you get bigger as a company, it's really about you will be multi-focus and you will be multi-purpose.
but you have now way more resources. We often have done that by creating product teams with general managers on them that were measured on the progress against their targets. They could really go after their targets for their vertical industry or their product type or their channel. They could own it. They could declare victory at the end of the month
So you can create focus in a multi-mission organization. You absolutely can. I mean, certainly Google was actually quite legendary for doing a lot of that stuff because they had a lot of successful things that they did. And I think there's many other companies that have done that as well. But you don't do it through a large, you know, monolithic functional organization because now everybody is a small cock in a giant wheel. And that doesn't create, you know, the momentum that you want.
In your experience, is there a number of priorities that people can focus on and deliver really exceptional results? Is it like one or two or three? Obviously, it's probably not 10. Is there a number that seems to be key? Obviously, greatly depends on what it is. I don't start off saying it has to be this number or that number. I just want to see what it is because these things are not created equal. It might just be one thing because it's just so big that it's going to consume us.
which is then fine. You know, sometimes it's not, and then we can address more, obviously more than one thing. Most product organizations obviously have, you know, have lists of projects and, you know, maintaining, moving all these things along, you know, with the focus and velocity and momentum. Yeah, that's the art of management, you know. You will know, you know, when things are,
grinding down to a halt and things are too slow, momentum is not happening. Revisiting prioritization over and over again is really important. You sort of want to convince yourself again and again, this is correct, this is correct, or no, it's not. It's not working, you know, based on what we're seeing. That's okay. You know, you don't know everything ahead of time, right? So you learn day by day and you calibrate and adjust, you know, from there.
It seems like bureaucracy naturally creeps into organizations if it's not fought. How do you go about fighting bureaucracy? What's your role in that? Yeah, that's a really important observation because larger companies, they tend to become their own worst enemies. It's not what the world does to them. It's what they do to themselves.
and introducing bureaucracy, in other words, undue process, you know, a lot of friction in terms of getting things done. So I often talk about this in my communications, you know, to the companies like, hey, you know, we have to hang on to our youth, our innovative muscle, our audacity, our daring. And, you know, I always say, look, you know, hierarchy, org charge mean nothing to us. You know, we operate through influence.
If you can convince people, great. And if you can't, well, then you just can't. It doesn't matter what your title is or what organization you come from or who your boss is. So it's really, it's an extreme meritocracy. It's really your ideas are judged on their merit, you know, not on, you know, where they're coming from.
You fight it. I always say, let's be like Peter Pan. You know, we never grow up, you know, at least not entirely, you know. So we maintain that chip on our shoulder, that attitude. And, you know, back to the insanely great thing, right? If we're not inspired what we're working on, that's a problem in and of itself. We got to go get that back fast.
I think I remember from one of the interviews I was listening to to prepare for this that you look for maladjusted people. I'm probably one of those people myself. But, you know, yes. I mean, look, you know, where does drive come from? Where does ambition come from? You know, it is a lack of adjustment because if you were a perfectly balanced person, you wouldn't have any ambition. You're so happy with where things are. You barely have a reason to get up in the morning, you know. But, you know, maladjusted people, they just have this –
this disparity between where they are and what they want to do and what they want to prove i mean all of us want to prove things either to our parents if they're still around or our siblings or our friends or people that didn't believe in us totally all this stuff and uh that's very powerful you know i remember you know i i had a we had a great exit with data domain back in 2009 and uh we were very proud of the work we did because it was a startup it was just you know
We didn't have product market fit for the longest time and it became, you know, we were a bigger accident than the next 10 competitors combined, all this kind of stuff. But then people started saying, oh, you're just lucky. You know how that goes, right? Well, you know, that just puts on the afterburners, you know, for me. It's like, I'll show you luck, you know? And that's attitude and attitude is something I like in people. I like people that have attitude, that have a chip on their shoulder, right?
that have a burning need and desire to prove something. Now over the years that will wear off a little bit, that is just the nature of things. I mean, when you're 18, you have a very different life experience than when you're 40 years older, depending on what happened in between. But I generally like people who sort of constantly are very, very strongly aware of where they are versus where they could be.
I rarely use the word proud or pride because that signals a profound happiness with the status quo. And I don't have that because I'm always at odds with the status quo. That's sort of the natural malcontent posture that we have. Yeah, we're here, but we could be there.
So what gives? How do we get there, right? So we're always envisioning a future that is different than the one that we're currently experiencing. If we could do it all over again, what would we do, right? Those kinds of conversations. So it's very refreshing. You're constantly sort of reinventing what's going on and also keeps you safe because there are people out there who don't have legacy. They don't have nothing existing. They start from scratch. Well,
they're going to get the better of you unless you develop that attitude in your own company, in your own business as well.
It seems like the natural state for most people is to get reasonably good at something, like driving a car, and then there's a bit of a complacency that sort of sets in. It's like I get to average or slightly above average in my job, and then I sort of let off the pedal. How do you prevent that? Obviously, the relationship with the people around you, your team and your managers, are people driving you to higher standards or are they not? Are they accepting
you know of the way things are but you know one way we do this um you know this is throughout the organization uh all our employees are all that are not in sales because sales people are on on commission plans but you know every quarter you know the company has to you know earn the bonus pool in other words the money that we're going to use for bonus we have to earn it and then we tell people how how how we earn it exactly what the metrics are and you know we share all that so they know hey
None of us are going to get bonuses unless the company gets paid. But once the company earns it, now we're starting to allocate the bonus money to managers and departments. And we just say, look, you use this money to send messages to all your people. There needs to be a bell curve. We want to know who is deserving of 2x, 3x versus who is deserving of zero so that we see the full spectrum of
the bell curve, if you will, of people that are performing incredibly well and the ones who are not in good standing. This is not so much about, oh, I don't want to give money to people who aren't doing well. It's more, are we giving enough to the ones who are doing great? I don't want the great ones feel like they're treated the same way as people that are obviously not in good standing. That's not a performance culture.
So, we do this every quarter and in the beginning when people have not lived this life before, it's very challenging for them. It's like, "Oh my God, I got to have a conversation like this about money and performance every single quarter with every single person. How do I do that?" Well, people get used to it because during the quarter they now start to have a different, you know, a much sharper lens on the work and how the work's getting done and they keep notes and they make notes.
And then they can really give a credible message back. And employees will also ask, hey, if I wanted to have 150% bonus or whatever number, what do I have to do? And by the way, that's exactly the conversation you want to have. What do I have to do? Damn good question. Let's go have that conversation. What do you have to do, right? Everybody wants to aspire to something. They want to be better.
But you've got to force that conversation to happen in such a way that it has consequences, right, in terms of compensation and recognition and celebration and all of that.
So I'm big on recognizing great work. I think great people need to be celebrated and rewarded and singled out in every way possible. Again, that's a merit performance culture these days that is being frowned upon in popular culture. But in enterprises, this is really important. People need to become the best version of themselves. And this is
this is part of how we go about doing that you know aside from money what other sort of mechanisms do you use internally to reward people it's recognition and and celebration you know um you know we for example we we have uh equity awards in in sales for people that are landing designated customers that we desperately want and uh
you know we we they're often surprised because they may have forgotten about it because it's not a you know it's just something that only happens when you you know you you land certain customers and uh you know we all get on it you know to send notes you know have conversations uh references and other conversations all of a sudden everybody knows in the whole company like wow this guy this team did this and they're like wow you know they're bathing in glory you know what i mean
And, you know, salespeople live for that. I mean, yes, they live for money. I know, you know, they're coin operated, but they also live for recognition because that is just, you know, it's very, very rewarding. It's in a very deep, you know, psychological way. It's very rewarding. So you want to bring that. Don't take it for granted, you know.
It's not like, oh, that's just doing your job. Yes, it is. But at the same time, man, this is amazing, okay? Especially when it comes from me as a CEO and they're like, my God, you're taking time out of your day to tell me this? I'm like, yes, we are. Well, most organizations are sales organizations. And I guess I'm wondering...
We all sort of recognize a bad sales organization because that business will go out of business. But what's the difference between a good sales organization and a great sales organization? You get much better sales organization when you have full alignment in the entire company so that everybody works, you know, for sales effectively. We always say that we're all working for sales here.
because they're the tip of the spear and the rest of us are really the wood behind the arrowhead. That's sort of the way I characterize the relationships between sales and the rest of the company. And sales needs to feel that wood behind the arrowhead. Everybody is killing themselves to help me succeed. And it's not so much that it's all about selling stuff and transactions and deals and all of that. It's just that sales experiences the reality of the marketplace.
the first and the most profound way. The rest of the organization sits much farther away from the cold winds of competition
and some of the ugliness that happens and the uncertainties and the anxieties and all these kinds of things. So yeah, sales is harder, which is why the rest of our organization needs to be in alignment and in support off them. So the alignment is really important, right? That we really provision the whole company behind that because they are experiencing reality in the marketplace and we, the rest of us, have to adjust to that. We got to help them. We got to change things.
And so it's a constant process of basically living their experience and what does it mean and how often are we seeing this and what are we going to do about it? But in terms of your question, I mean, one thing that's really important to me, I'm a stickler for this.
consistent execution in sales organization meaning that every quarter everybody shows up you know what what we can't have is like well yeah the back quarter but I'm going to do better next quarter I don't want that okay we need to run ourselves and our organization in such a way that we show up all of us every single period you know every single line of business Channel geography
And so on, right? And if that becomes the culture, the expectation and the reality, you're going to do way better than the rest of them. Because, you know, sales tends to be, you know, a very unevenly distributed thing. And you want to work on that. And so the expectation is, you know, I don't care how far ahead of plan you are. You have a shitty quarter.
That's not a problem with me. I can't build on you. I can't trust you. I can't expect that you're going to deliver. And you work on that all the time, right? People that are not consistent, you better find a way to get there. Not overnight, but you're going to make moves. What moves are you going to make? What are the reasons that this is
What are you doing differently? Right? Because we always say a good quarter is one where you exceed your numbers, but also one where you set yourself up for the next one. You got to do both. It's not just about making the quarter. You also have to lay the foundation for the next one and the rest of the year. So you got to think much more long-term, much more strategic, you know, about your business rather than I'm just trying to hit a number for the quarter, you know?
I think of that sort of like running a billiards table, right? Like where you leave the ball matters for the next shot. It's a good analogy. Just anybody can make one shot, but you want to run the table. Exactly.
there's a natural tension between sales and product. And at the start of an organization's life cycle, you can sort of get away with customizing the product per sale. But when you start getting into enterprise, you can't do those things. How do you think about the relationship between sales and product and who's driving the bus and who's not and how that looks? Yeah, you know, there's tension there. Sometimes healthy, sometimes, you know, not as healthy. And, you know, it's a relationship that has to be
managed very aggressively, certainly want a product organization that really views the reality of sales as their problem, okay, as opposed to, well, you guys are just not smart enough or whatever. And they're interested in all kinds of things that have nothing to do, you know, with the sales organization succeeding. The alignment, again, is number one, but you have situations where, you know, sales goes, this is not working, okay? And we have enough data points to say that it's not working, okay? What are we going to do?
So that dialogue goes on all the time. You know, we make mistakes. You know, we prioritize incorrectly. We're too slow on certain things. I mean, all these things happen, right? But that's a continuous force field that we're working on. You know, the thing about sales is that
you know great sales people can't sell a bad product right but lousy sales people can sell a great product okay and that's that's very important because you know oftentimes in silicon valley they think that sales is the problem and i'm like
No, because if you had a great product, you know, even an average or below average salesperson will be able to sell it. Right. And typically sales problems are product problems. But typically that's not the initial assessment because, you know, you don't want your baby to be called ugly and ugly.
The investors around the table have invested in your technology, so you don't want to openly face your demons and really confront things the way they really are. And that then leads to a focus and solutions that don't work. Like, well, let's hire another VP of sales. Well, that won't work because your product is the problem. Yeah.
So I do hold the product people to a very high standard because we have to make very average salespeople productive in a very predictable manner. That's hard. And that's exactly, that is where the focus should be. Because if I have to hire brilliant salespeople, even though even brilliant salespeople can't sell a lousy product, there aren't that many of them. So that's not a scalable model. Would you go as far as saying a great product sells itself?
Almost. I've certainly seen that with my own eyes in various companies. I used to say about Snowflake, it's like a two-year-old golden retriever. All I got to do is parade them around and everybody's going to want one. And it sometimes wasn't that far off because it was the benefits themselves.
were amazing. I mean, you benchmark these products and sometimes they were an order of magnitude faster, you know, because of all the architectural breakthroughs and the provisioning of the workloads. So people were like, wow, I mean, that wow experience is just priceless, right? So all you have to do is get people to try it and they go like, yeah, this is a no-brainer. And so in that sense, it almost sells itself. I mean, we used to see that with companies like VMware as well. I mean,
you know, once people were sold on virtualization, I mean, all they were doing is picking up orders, right? This is actually, you know, a bit of a problem because, you know, you hire people from a very successful company. They've never really sold because they were just riding the momentum, you know what I mean? And then they get into a company where they do have to really sell and they do have to campaign and they do have to fight and they have no idea because we never had to do that before, right?
So I like to hire salespeople who have really been in shit fights because that breeds the type of skills and focus that you really want to have rather than people that are good at quoting and picking up orders. That's an incredibly valuable point. I don't think I've ever heard anybody mention that before. What are the methods of thinking that you would use sort of in the first 90 days to assess the degree to which the problem is not
wrong sales or, or product? Like, how would you go about determining where that problem lies? Do we have the wrong sales organization, the wrong culture? Do we have the wrong product? And, and obviously it's probably a little bit of both, but how do you go about thinking about that? Yeah. And by the way, it is often a little bit of both, which is what creates the confusion, um, you know, around these topics. But look, you know, I'm,
I can't tell you how many customers/prospect calls I've already been in this week. It's Friday, you know, and there were numerous ones. I must have talked to seven or eight banks this week, you know, CIOs, CEOs. I experienced reality the way the salespeople are, obviously a little bit differently because I talked to higher level people in organizations. But, you know, I experienced things firsthand. What you don't want to do is sort of, you know, rely on information, you know, because you just get it secondhand, thirdhand, fourthhand.
And you don't know whether you're dealing with a feeble person that has no fortitude or whether you're dealing with a real issue. So there's no substitute, you know, for inspecting things at the front lines and really be part of it. I always tell salespeople that if I can't sell it, I'm not expecting you to sell it. Okay. So if you're going to get your nose bloodied, I'm going to get my nose bloodied. Right. And so you need to get to reality. In other words, you need to see things as they really are.
So you got to be very, very careful with second and third hand information. And sometimes I got to whip people up the hill. It's like, look, you guys are basically you're intimidated by the marketplace, your own worst enemy because you just lack fortitude and confidence and you can't articulate things. And that's all under the header of sales enablement. Right. And I personally get after this.
I'm very aggressive in terms of really pressing our case in front of the customers in the marketplace because I need my organization to do the same thing. If I'm not doing it, then they're not either or they're not going to go at it with the same confidence and fortitude.
So leadership is important there. You want to set an example that people go like, oh, I guess that's the way it is then. And, you know, I should be too. So you bring forward, but, you know, people see me talk in front of a customer. They go and they see the customer react and they see the customer ask questions. They're like, hey, I can do that too. Okay.
There's no better learning than right in front of where the action happens. So you want to bring that. If you just want to post some data sheets and some videos and what have you and sit back and wait for things to happen, you're going to get killed. So you want to press all the way into the end zone. And then people go like, okay, I think I can do it. You know, I've seen it. The results are there. It works.
We talked about positioning yourself for future success, and we sort of used the analogy of running the billiards table. What are the ways that an organization positions themselves for success tomorrow that is hard to do today, that's hard to compete with, but makes tomorrow easier? I've always told other CEOs, especially people that are sort of first-time CEOs and new CEOs,
that you can count on the fact that you will be confronted with a need for transformation because it happens to all of us and the question is will you recognize it will you recognize it in time and will you be able to execute on it these are all super big questions because you walk into a situation
It works and then one day you wake up, it's not working as well anymore. The world has changed and the world does change. The technology changes. I mean, you see a lot of that right now with AI, obviously. People's perspectives and narratives, they're all up for grabs. I mean, it's one of the most disruptive things I've ever seen happening in the world of software in all my years of doing things. But you also...
The early adopters, and in Jeffrey Moore style of thinking, are very, very different than when you get across the chasm and you're dealing with a more mainstream customer.
because they buy differently. People ask me, why do you think this is sort of a late adopter? I'm like, well, because he hasn't bought yet. That's why. He would have bought already if he was an earlier adopter. So by definition, he didn't. Why didn't he? So he has different ways of assessing and thinking about the value, about the risk, all these kinds of things. And these things are difficult to observe. Sometimes you just wake up and you're like, you know what?
things are different now they have changed just in in the aggregate you just sense the change that is that is that is happening um and then this becomes a question okay we have to adjust we have to change we gotta do all these uh you know all these things
But the need for transformation, people don't expect that because we have a very, you know, humans have a very linear attitude about the world. In other words, it's just going to continue as it is. We rinse and repeat and it will never change. No, it will change. And it's just a matter of, you know, can you recognize it and can you do it in time? And then will you know, you know, how to successfully deal with that? And a lot of people can't.
They'll fail on recognizing it or they fail on the timing of it or they fail on the execution of it. And we've had a lot of great enterprises, obviously, that we all know. I mean, you look at the Fortune 100, the Fortune 500. I mean, how many companies are still there that were there 20 years ago and 30 years ago and 50 years ago, right?
So you got to, as a leader, as a CEO, you got to be extremely open-minded about what is happening, right? And not assume the linearity of the business. It takes many forms. Some things are incredibly disruptive. You know, some things are marginal. So that's, by the way, the rest of your organization will not have this posture because they got their heads down. They're very much in a pattern, in the mode.
So that means that you really, you don't want to have that mode about you as the CEO, as the leader. You want to be, basically, you make everybody else work. You got your head up when they have their head down. You mentioned AI is the most transformative thing you've seen. Talk to me a little bit about
About AI. I've not always been the world data, but I started out very early in my career in the world of data and I've gotten back to it again and again and again. So I've seen the challenges from the early days, you know, just being able to take transactional records and being able to put them into a format that
where it was sort of human readable and sensible for humans to consume. And I mean, this is going all the way back to the late 80s, when we have what we back then called decision support systems. We didn't even have the term of business intelligence or none of those terms even existed back then.
But, you know, especially in the, by the way, there was only certain verticals that did this, like retail was really big on it. You know, they would be able to sort of break the SKUs down by, you know, by location and channel and store and all these things. Very, very granular, detailed data. These are massive mainframe processes that would run usually on a monthly basis, you know, let alone the 24-hour cycle. So every month you would get data. That was already a big deal back then.
So things have progressed. Our relationship with data has progressed very slowly, painfully difficult. And obviously, the biggest change we had until now was really the introduction of search, right? I mean, it's now 25 years ago. I mean, I became a search junkie. I still am to this day because I find it so empowering in terms of your relationship with data. But search...
now feels old because, you know, it matches on strings. It's stateless. I mean, it doesn't remember a damn thing from one search to the next. And it has no context. You know, if you search on Snowflake, you might get the weather, you might get, you know, you might get the social phenomenon, or you might get the company because it doesn't know. It just knows the word. So we now have opportunities to massively enrich and contextualize
you know, search, you know, searches for data. So I really see what data is going to just get catapulted into the future here. Just unbelievable. We'll be able to ask harder and harder and harder questions of our own proprietary data and get better and better and more valuable answers. I mean, it's fairly easy, you know, to use natural language interfaces now. The whole text-to-SQL has become, you know, table stakes.
I mean, you can interrogate, you know, Salesforce data on Snowflake, you know, just text to SQL. And it's really nice, by the way. I mean, hell, it's a whole lot better than using dashboards for the most part. Not all of it, but for the most part. So, fine, you know, that's a step forward. But, you know, I want to ask very business-specific questions. You know, I have an insurance company.
You may say, hey, you know, I have disproportionate bodily injury claims in this state compared to the surrounding states. You know, A, what's going on? B, am I going to have it again next quarter? C, what might I do about it, right? Should we just stop, you know, underwriting in this geography altogether, which is what's happening in California right now? And or, you know, we obviously it's a pricing issue because how do we price risk? You know, is it a policy issue?
Those are questions that, you know, God, analysts would be launched on, right? Because people would do the reasoning, not the system, that the system becomes like an advisor to you in literally in damn near real time. So this is, this is, this, our relationship with data is going to get amped up here to use a term in ways that we just can't even imagine. Obviously content generation is what everybody's looking at and they find it very cool. And it is, you know,
But how is it going to work in medicine? How is it going to work in education? I mean, it's going to be a renaissance in intelligence and computing and how we mobilize data for purposes. Yeah, it's a great time to be alive. And I think the innovation will drive a lot of new employment.
We will also have a lot of obsolescence in jobs and even functions and industries and processes. But that's the nature of a capitalist free economy. Creative destruction is just the nature of stuff. And we do pretty well with that, even though it can be disruptive.
I mean, we used to learn one profession and that would last us for our lifetime. Now you need to shift gears more than once in your lifetime because it's moving so much faster than anything we've ever seen. So the acceleration is going to be dizzying. There's no two ways about it. Is there anything that gives you hesitation about AI?
Yes, of course. And people talk about this all the time. I mean, social media created the fake news phenomenon because so many people use social media to inform their reality, which I don't recommend that, by the way. I always tell people, turn that shit off, man, because you're distorting how you really should be interpreting things. And I don't like that. But social media had a lot of good things, obviously, but it also had the flip side of
you know is that you know people uh it became very very powerful influencing people in terms of how they experience the world uh obviously this can take that to the nth degree you know i mean it can change the realities how's that gonna go right you can see the uh the opportunities for for abuse uh becoming extraordinary
Yeah, we're going to have to deal with that, but we have to still count on the goodwill of men and women because that's all we have at the end of the day. One of the things we talked about earlier I want to come back to just before we end the interview is you talked about we all make mistakes. How do you handle a mistake? How do you recognize that you've made a mistake? And then what do you do when you've made a mistake, you personally? I use mistakes as it's a cultural moment and a teaching moment.
Because it's actually good for me to go, "Oh, I really screwed this up," because you can do really well in the world by being a fast course corrector. What is devastating in organizations is when people defend bad decisions. But if you can fail fast, that was Scott McNeely used to say, "Fail fast." If you can fail fast and correct, you can do really well.
So mistakes can become a real cultural moment. It's like, hey, you know, I really screwed this up. Let's unpack this and understand what were we thinking? You know, what were the assumptions that were wrong, right? And then, you know, that's a good culture because now everybody goes like, look, I can revisit my dumb decisions now, all right? In other words, fail fast, you know, have urgency around your bonehead,
you know decisions that you've made and the things that are not working that's really what you want and uh when i do it you know it's basically now it gives permission to everybody else to do it i i'm basically politically neutralizing you know the idea of making mistakes because making mistakes everybody who makes decisions will make mistakes you know people always ask me what are your biggest mistakes well my biggest mistakes are always around hiring you know it's like
You know, I've hired a lot of great people over the years, but I've also made my share of mistakes because that's just the nature of things, right? But if you're willing to confront it, I sometimes, and I talked about this in the book as well,
I may make mistakes again and again on the same topic, you know, but the one thing I will tell you is I won't stop until I get it right, okay? And I will, in other words, I'm willing to say again and again that I screwed it up, but I won't stop, you know, until we're in the place that we need to be. So that's a very powerful message to people to say, look, this is the behavior we want. Confront your demons now.
basically, uh, you know, go after the things that didn't work, that were wrong. Um, God, if you can get people to, because most people, you know, they're afraid they're going to defend their decisions and, uh,
And especially when it's a gray zone, right? In other words, it's, you know, some people are, you know, not good enough to keep, not bad enough to fire. You know, those are the worst cases because like, well, you know, person looks nice, speaks, speaks well, articulate, you know, but they're the ultimate passenger. They never move a dial. Right. And, and, you know, those are the ones that always survive, you know, way too long, you know, until we have mass layoffs and all this kind of crap going on. But,
But you can get people to say no, you know, when there's doubt, there's no doubt, you know, have a higher bar, you know, have high conviction. That's hard, you know, trying to get your organization to get to that level, you know, of, you know, basically very unyielding, uncompromising. That's hard because most people want to lay the bar lower and, you know, not rock the boat, not be confrontational because all that stuff is hard, hard, hard, you know.
Those passengers are probably the easiest ones to hire too, because they get to the interview, they say the right things, they check all the right boxes, and then they come in. Interviews are notoriously difficult to hire with, I would imagine, because you just really want to see on-the-job performance. How do you assess that?
Well, you're exactly right. Interviews are far less valuable, not for all roles. I mean, there's roles where interviews, like, for example, in engineering, I mean, they're like, they put them in front of a whiteboard and say, here's, you know, write code that does this. So you can...
You can very much test people's skills that way. But in the other roles where people become good at selling themselves, because they've learned that over the years and they talk well, they look well, and they're very pleasant and they're getting along and all these things. But the way to find out anything about people is to fully surround where that person has been.
And, you know, if they've been at company A, you know, you go find out who in my company was at company A while this person was there. And let's go. I'm going to go ask inside the company first who knows this person because you were a contemporary. And, you know, what was that person's reputation and so on. You learn a whole bunch of things very quickly. You don't even have to go outside of your own company to, you know, to find out.
And then you see if consistency of information is manifesting or it's still confusing and contradicting and all this kind of stuff. And then we go outside. We go call people that we know or have known and say, hey, you really want to hear from people that have directly worked with them and say, what was the experience like? It doesn't have to be an indictment type of conversation. It's like, look, I just want to know more about this person.
How did this go? Tell me some stories." Because now you start to really get color and texture around the person as opposed to the sniff test, which is what an interview really is.
And the thing is, you're going to learn, you're going to get great conviction now because you're like, you know what, I think we're really on to a great person. Or you're like, wow, you know, I'm glad I made these calls because, you know, we were, this was not trending, you know, correctly at all. And I find that people rush, especially in fast-growing companies, you know, we have hiring targets everywhere.
and they're just slamming bodies and it's the worst thing ever. I'd rather hire more slowly but better than faster and I have to do a lot of course corrections along the way.
and people are lazy they're like oh yeah it's probably okay no probably okay is not the standard you need to know and have conviction and you need to take the time and do the work to to develop that conviction especially in places like europe where it's so difficult to separate and so expensive and so time consuming the opportunity cost is enormous
you really, you know, need to do the work, right? So, uh, you've got to bring that into your recruiting culture. It's like, it's not like a check a box, see you on Monday. No. It sounds like you just hit on something that I think is one reason that your cultures are always so successful, which is you just elevate the standard. I mean, having I stand in this goes back to the insanely great, uh, Steve jobs. I mean, he, he, he, he had a really hard time dealing with, with mediocrity in, in any, you know, in any realm. And, uh,
Yeah. It's very hard to live with, by the way, because Steve was super hard to live with. I mean, everybody was a shithead and didn't know people's names and all that. Yes. I know it's hard to live with. And I'm personally, I'm not that way, by the way, I don't, I don't treat people that way at all.
But at the same time, you know, the leadership needs to really reinforce. We have very high standards and then other people will want to follow that. Okay. They will do it because they feel like that is the way, that is the right way. Leadership sets tone, sets expectations. And if you don't do that, yeah, you become the California DMV, the worst goddamn place in the world to try and get something done, you know? Yeah.
The lack of leadership, people go slow. They go substandard. I mean, it's just a hellish world. It's like I feel sorry for the people that have to be there. So as leaders, let's create an environment where great people feel like, yeah, this is a good place. This is a great place. They have urgency. They have high standards. They move fast. That's what you want. That creates energy. It gives energy. It just lets people, the right people will love it.
And some of the wrong people will go like, you know what, this place is too intense for me. I can't handle it. You know, I need to get the kids from school at 4 p.m. I get that, right? But it's like culture. It doesn't mean that people are bad, you know, when they don't like the culture. It just means that they are not a fit. They're just different, you know?
Totally. We always end on the same question, Frank, which is what is success for you? You know, it's just not a word that, you know, I'm constantly thinking about or you're thinking about that, you know, at all. You know, I'm by the way, your thinking gets sometimes poisoned by the type of words that you use and the concepts that
that you're preoccupied with. I mean, people sometimes ask me, what's your legacy? Legacy is not a word that I use, okay? It's not, I find that very sort of, a lot of self-absorption around that stuff. Like, you know, I need to live beyond the grave. I really don't need to, and I don't want to be, you know, feel so important that that's even a question, you know? My enterprises that I'm in charge of,
must succeed, you know, they must succeed because that is the contract that I have with all my stakeholders. You know, they're not just investors. Obviously, I want them to succeed because the investors succeed with us
My employees are going to succeed as well. I'm trying to give my employees, you know, an incredible shot at changing their station in life, advancing their careers where, you know, 10 years from now, they still feel like, well, that's the best thing I ever did. And I get a lot of that from people that have worked with us in our prior companies. And it's very personally rewarding to hear that, that they still, you know, have, you
warm feelings about the experience that they had. Not just the money they made, but just the people they were with, the things they did, and they became better than they ever thought they were, right? That's success to me is achieving that in my partner ecosystem.
I want them to be wildly excited about being our partner. They're succeeding with us, right? So we try to make all parties succeed in their own worlds with us. Employees have their own agenda. They have families. They have circumstances. They have issues. So we help them and everybody else that's part of our universe. I guess that's the best way I can answer that question. Thank you so much for taking the time today, Frank. That was an amazing conversation.
You bet. Anytime. Thank you. Thanks for listening and learning with us. For a complete list of episodes, show notes, transcripts, and more, go to fs.blog slash podcast, or just Google The Knowledge Project. Until next time.